The hottest topic of rumor columnists and gaming sites alike for the past eight months has arguably been the apparent disbandment of Rare from longtime ally Nintendo. Now Microsoft has reportedly scored on an opportunity Nintendo missed.

Nintendo has reportedly decided to pass on an offer to extend their 49% stake in Rare to full ownership, citing declining sales of Rare software as the reason. In response, ownership of Rare has been sold to Microsoft in a deal that will be officially announced at Microsoft's X02 Europe event on September 24.

Nintendo has issued the following statement regarding the sale:

We can tell you that Nintendo has made the decision not to request Rare to make any further exclusive games for the Nintendo GameCube. Although we're proud of our joint efforts with Rare over the years and have enjoyed our relationship with them, in fiscal year 2001, Rare accounted for only 9.5% of total Nintendo software revenue worldwide. In fiscal year 2002, that number declined to 1.5%. Therefore, in evaluating our investments in developers, as well as the financial benefits to Nintendo over the years, we've decided it's in Nintendo's best interests to focus on diversifying our portfolio of developers and projects.

Star Fox Adventures, which was jointly developed by Rare and Nintendo, will launch as scheduled on September 23rd and will remain exclusive to the Nintendo GameCube. Nintendo's other great franchise characters such as Donkey Kong also will remain exclusive to Nintendo.

We have no additional details to share on this issue at this time.